Daniel Birnbaum, CEO of carbonated water maker Sodastream, and Ramon Laguarta, CEO of beverage giant PespiCo, announced plans to open a Sodastream manufacturing facility in the Gaza Strip in an effort to create jobs in the Palestinian enclave, ruled by terrorist group Hamas. The announcement was made last week on the second day of the Globes Business Conference in Jerusalem, where the CEOs also discussed Pepsico’s recent acquisition of Sodastream for an estimated $3.2 billion deal and unveiled the fresh piece of news to the audience.
Birnbaum said the plant in Gaza will be operated by a subcontractor. “We want people in Gaza to have real jobs, because when there is prosperity and plenty, there will also be peace,” he was quoted as saying at the conference.
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Israel and Egypt have maintained a military blockade on the Gaza Strip since 2007, after Hamas – which is sworn to Israel’s destruction – seized the territory in a violent coup from the Palestinian Authority. Israel says the blockade is in place to prevent Hamas from importing weaponry and other military equipment. Israel and Hamas have fought three wars and several flare-ups over the past decade. These have taken a toll on the Gaza Strip which has been in the midst of a humanitarian crisis for some years. Israel and the international community provide aid to the Palestinian enclave’s two million residents, but there are also severe restrictions, skyrocketing poverty and conditions and one of the highest unemployment rates in the world.
In welcoming plans to set up the Gaza plant, Laguarta said that “business can be a bridge in certain cases.” There were no further details on the factory but the move would be in line with SodaStream’s core philosophy of integrating both Jews and Arabs into the workforce in a bid to create a constructive dialogue via business opportunities. Any future Gaza plant would not realistically employ Israelis, however.
SodaStream has had a complicated history with co-existence, but it’s not for lack of effort.
Until 2015, the company operated a plant in the Mishor Adumim industrial zone of the West Bank settlement of Ma’aleh Adumim, at the edge of the Judean Desert. The factory employed hundreds of Palestinians but was forced to shut after it became the target of a fierce campaign by the Boycott, Divestment and Sanctions (BDS) movement. BDS mounted the campaign after SodaStream hired American actress Scarlett Johansson as a brand ambassador.
Amid the controversy, Birnbaum consistently highlighted that the factory was a source of tremendous professional opportunities for Palestinians and symbolized a model of co-existence. But SodaStream eventually relocated to Negev desert area, where it now employs hundreds of Israeli Bedouins, and some Palestinians, according to Birnbaum.
“The diversity in the plant is very important to us,” he said at the Globes conference last week. “We love to show what peace looks like. At the factory, there are 1,000 Jews and 1,000 Arabs, including a few hundred Palestinians. You wouldn’t believe it — we get along. We live in peace and harmony, and people are smiling and friendships are emerging.”
Last year, the company decided to begin displaying a large Israeli flag with the words “MADE IN ISRAEL” on all of its packaging. Below the flag a note reads “This product is made by Arabs and Jews working side by side in peace and harmony.” Birnbaum said at the time that the Israeli flag would be placed on all of the company’s products, 50 million of which are on store shelves worldwide.
A $3.2 billion dollar exit
PepsiCo’s acquisition of Sodastream was completed earlier this month. The overall deal was valued at $3.2 billion, marking the third billion-dollar exit for an Israeli company in 2018 and PepsiCo’s largest buyout in eight years.
Laguarta was quoted by Globes as saying that the deal was “a great opportunity for Pepsico, given the great vacuum in the beverages market resulting from reduced use of plastic, which Pepsico is filling through the acquisition of Sodastream. This vacuum will grow more and more quickly, and here is where Sodastream’s personal touch comes into play.”
“We feel that there is a huge opportunity for us, among other things for our global development. Essentially, what we have acquired is a stunning team and special leadership bursting with skill and talent, and I’m a great believer in human power,” he added.
The CEO, whose business deals in Israel include the Strauss family and the Tempo group, explained that upon his first visit of the SodaStream plant in Arad, he was strongly impressed by “the human state of the plant,” Globes reports, which has 2,000 employees including Jews, Arabs and Palestinians, Birnbaum says.
Sodastream has also built a solid reputation as an environmentally conscious drinks developer, advocating strongly for the discontinuation of single-use plastic bottles within the industry and promoting reusable ones. Last year, it won Business Intelligence Group’s 2017 Global Corporate Sustainability Award for its line of eco-friendly sparkling water makers.
As part of its strong environment-focused approach, Sodastream launched a new initiative in October that aimed to rid the waters of plastic waste, only nine percent of which is recycled. The company launched “Holy Turtle” – a massive contraption designed to clean plastic waste from open waters as part of an ambitious clean-up operation led by Birnbaum.
The device was piloted in the Caribbean Sea, off the coast of Roatán, Honduras, with 150 SodaStream executives from 45 countries teaming up with the Amsterdam-based environmental NGO Plastic Soup, as well as international environmental specialists, hundreds of children from seven local schools in Honduras and government officials, for the initiative.
The company also recently came out on top of a legal battle launched by producers of bottled soft drinks and sparkling water Coca-Cola European Partners Belgium (Chaudfontaine), Danone (Evian), Nestlé Waters (Vittel and Perrier) and Spadel (Spa en Bru) to shut down SodaStream’s advertising campaigns which seeks to highlight the negative impacts of plastic waste.